News Release

HHS Secretary Leavitt Asks Employers to Commit to Health Care Quality and Cost Reporting for Employees

HHS Secretary Mike Leavitt today called on employers throughout the nation to commit to four steps to improve health care quality and reduce health costs by improving information in the health care sector.

Fundamental information about health care quality and costs of services is largely unavailable today to consumers, to payers, and to providers alike. Without this information, it is difficult to make informed choices and seek out the best quality at the most affordable price. This contributes to higher health care costs overall.

"If we are going to get a handle on health care costs -- and we must -- we first need to know what our costs are and what we are getting for our money," Secretary Leavitt said. "Our nation's private employers are the major source of health insurance for Americans, and they can help us provide the information consumers need to achieve better value for their health care dollars."

At a meeting of business leaders representing large and small companies nationwide, Secretary Leavitt said commitment to four �cornerstone� goals would lead to improved quality of care and lower costs:

• Standards for connecting health information technology, making it possible to share patient health information securely and seamlessly among health care providers.

• Quality of care reporting, so that health care providers as well as the public can learn how well each provider measures up in delivering care.

• Providing costs of health services in advance, so that when patients choose routine and elective care, they can make comparisons on the basis of both quality and how much of the total cost they will have to pay under their health plan.

• Providing incentives for quality care at competitive prices, as in payments to providers based on the quality of their services, or insurance options that reward consumers for choosing on the basis of quality and cost.

Last August, President Bush signed an executive order committing federal health care programs to the four "cornerstone� goals". Medicare, the Veterans Affairs health system, the Federal Employees Health Benefit Program and certain other federal health care programs will begin delivering on the four goals in the coming year.

Private employers are the largest source of health coverage for Americans. If a significant number of employers also commit to the four goals, common standards for health IT, quality measurement and cost reporting would quickly become the standard throughout the health care system.

Standards to measure quality and cost are to be developed through consensus processes involving stakeholders from throughout the health care sector. In particular, standards for measuring quality of care must be led by the medical community, Secretary Leavitt said.

By spring of next year, when payers put out their requests for proposals for 2008, the Secretary's goal is to have more than 60 percent of the marketplace include these cornerstones as a significant part of their purchasing criteria.

An employer committing to the four "cornerstone" goals would collect quality and price information through its health plan or benefit administrator, using the consensus standards. Employers committing to the goals would also be encouraged to share quality and price information with regional collaboratives, where information from many sources could be aggregated, thus producing the most broad-based and reliable information possible. The employer or its health plan would share quality information with enrollees in the plan, and would provide information on costs, including the specific costs the enrollee would expect to pay under the plan.

In this way, often for the first time, consumers would have the information they need to choose routine and elective care on the basis of quality and cost. Health care providers would likewise be provided quality and aggregated price information that showed how they compare with others. An advantage to providers would be more uniform methods of quality measurement, especially methods where providers play a leading role in the development of the measures.

"This approach is about providing better information for everyone, up and down the health care system," Secretary Leavitt said. "Consumers and payers need this information, but physicians and hospitals need it just as much. That's where quality and value improvement will really take place."

States will also be invited to join in the commitment to the four goals, both as employers and in their Medicaid programs. Secretary Leavitt also pledged to work with health care providers and health plans, unions, consumers and others in achieving the four goals.

Secretary Leavitt spoke in Washington, D.C., at a National Summit for Employers. He emphasized that the initiative is voluntary and each employer needs to make its individual choice. Employers that agree to the four goals will be encouraged to sign a support statement as part of a package of materials that is being made available to employers and other health care stakeholders. As a start, Secretary Leavitt said he hopes that 100 individual companies or more will sign up by the end of this year.

The Summit was convened by the Business Roundtable and other organizations including the American Benefits Council, Bridges to Excellence, the Corporate Health Care Coalition, the HR Policy Association, the National Association of Manufacturers, the National Association of Wholesaler-Distributers, the National Business Coalition on Health, the National Business Group on Health, the National Federation of Independent Businesses, the National Retail Federation, the Society for Human Resource Management, the ERISA Industry Committee (ERIC), the Leapfrog Group, and the U.S. Chamber of Commerce.

More information is available at www.hhs.gov/transparency.

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Note: All HHS press releases, fact sheets and other press materials are available at http://www.hhs.gov/news.

Last revised: November 17, 2006